The Social

Offerpal Media, one of the companies at the center of a bitter dispute over misleading advertisements on social networks, on Thursday launched a revised policy designed to "forbid any offers that are misleading, deceptive or otherwise objectionable."

Companies like Offerpal are enlisted by many of the big gaming companies built on social networks like Facebook; they help those companies make money by letting game players earn points and virtual goods by completing offers and surveys rather than paying real money.

They make a lot of money doing so. So do the game companies, like Zynga and Playfish (recently acquired by Electronic Arts), which in turn advertise heavily on the likes of Facebook to recruit new players.

But then the negative press started to emerge: many of these "free" offers and surveys actually had hidden costs attached to them that weren't adequately disclosed. Some companies like Zynga started backtracking and going so far as to ban offers altogether. Facebook and MySpace, the two biggest social-network platforms, made very public revisions to their policies. But the controversy continued, and both Facebook and Zynga were named as defendants in a federal class-action lawsuit.

Offerpal, which replaced its CEO amid the controversy, has now come out and said that while it's setting a basic standard for advertisement quality, game makers and publishers enlisting Offerpal's services can opt to be even more stringent. "Offerpal will rate all offers by quality and allow its partners to select a quality level of compliance ranging from 'Level 1' for minimal restrictions to 'Level 5' for highly conservative restrictions," a release explained.

Will the new restrictions keep angry bloggers and consumers--not to mention lawmakers--at bay? More importantly, are they going to amount to anything more than smoke and mirrors? We'll see.

Sold!

Auction site eBay has, as long anticipated, sold off the Skype telephony service to a group of investors that includes Marc Andreessen's new Andreessen Horowitz group, Silver Lake, and the Skype co-founders' Joltid Ltd. The investor group now holds about 70 percent of the company; eBay retains the rest in a minority stake. Joltid was brought into the investor group as part of the settlement of a copyright suit that the Skype co-founders, Janus Friis and Niklas Zennstrom, filed against eBay over Skype's technology. At one point, that dispute was looking so ugly that eBay was reportedly considering rebuilding Skype's technology altogether.

The sale amounted to approximately $1.9 billion in cash and a note from the buyer in the principal amount of $125 million, for a total of $2.025 billion.

eBay's plans to get rid of Skype, a purchase that had never fit quite well into its auction business, had been well-publicized. Last spring, the company formally announced that it planned to spin off Skype as a publicly traded company in the first half of 2010.

The final $2.75 billion valuation is only slightly higher than the $2.6 billion that eBay originally acquired Skype for in 2005.

The simple concept of having virtual-good payments in games sent directly to your cell phone bill has gotten a lot of buzz--and stirred up a lot of rivalry. One of the start-ups looking to pull this off, Boku, announced Monday that it has signed on a dozen new gaming partners, both a few based on the Facebook platform and some others that are either Web-based or desktop downloads.

The partner companies are Waves, Cie Studios, Cyberstep, GameDuell, IGG, King.com, NHN USA, Ntreev, Outspark, PerfectWorld, Snap Interactive, and Zoosk. Most of them aren't household names: they're game manufacturers, not the games themselves, and some of them are most prominent outside the U.S.

There are a handful of companies trying to grab market share in this space, but the two who have been most vocal about making inroads have been Boku and rival Zong, which last month announced that it would allow members to sync credit cards with their phone numbers, allowing for larger payments and putting the company closer to direct competition with the likes of PayPal.

Boku says it's sticking to the mobile-number-only strategy, choosing instead to ink more deals and emphasize its global reach: with the current round of partnerships, the company says it will have 200 million registered users added to its ranks (no word on how active they all are, or how much redundancy there is across games).

Additionally, Boku has made some infrastructure upgrades that it says will improve the user experience, including the ability to detect whether a phone number that has been entered is landline or mobile--and if mobile, what carrier it's coming from.

Location awareness is hot, from gamelike social services such as Foursquare and Gowalla to platforms such as Google Latitude. Now one start-up is hoping to make it as easy for any company to integrate into a Web or mobile service as it is for retailers to use PayPal. Meet SimpleGeo, which on Thursday is launching into a private beta.

Boulder, Colo.-based SimpleGeo, co-founded by former Digg engineer Joe Stump and Socialthing founder Matt Galligan (who sold the would-be FriendFeed competitor to AOL), started out as a company called Crash Corp. earlier this year. The goal was to make augmented-reality applications for mobile devices like the iPhone, but the founders said that building the location-aware infrastructure for their first game took a whopping three months.

So they changed their company name and angle: SimpleGeo's purpose is to build that infrastructure for other companies to eliminate the development hell, hoping to do for "geo" apps what PayPal did for sites requiring payment systems or Facebook did for sites requiring logins and social-networking features. The complete offering, which can also build in augmented-reality features, encompasses storage, analytics, and a software development kit (SDK).

Three versions are available: free, $399 per month, and $2,499 per month. A public version is slated to launch in the spring.

Nobody's really doing this yet, though apparently a few other start-ups are toying with similar business plans, and SimpleGeo is still new enough that it has not yet closed a round of venture funding. Because it's in private beta, we also haven't yet seen just how powerful it is (though Galligan has posted some test video to Flickr) so it's not yet possible to answer the big, glaring question: what if Google makes a big, developer-focused Latitude push that could snuff out smaller competition?

In the wake of acquiring smaller digital music services iLike--and now, it looks like, Imeem--MySpace continues to attempt to align itself as the foremost player in the digital music industry. On Wednesday, the News Corp. division rolled out a music charts page to track the most popular music getting listened to on the social site.

It's fairly self-explanatory. There's a prominent "movers" section featuring artists that have seen an uptick in activity recently, and music can be filtered by genre, country, and label category (indie, unsigned, or major). Then there are links to "friend" an artist, buy songs, and watch music videos on MySpace's recently launched music video portal.

(Credit: MySpace)

The design, regrettably, isn't very user-friendly and requires quite a bit of scrolling. And in a world of finely tuned "music discovery" and personalized recommendations, charts can seem a little bit static. A blog post from MySpace Music head Courtney Holt assures that it's "just the beginning of a product and platform evolution that reinforces the key messaging, vision and direction of the new MySpace Music."

MySpace launched its music service last year as a joint venture with major and independent record labels, and has received a mixed response as the industry continues to grapple with the fact that no non-iTunes digital music service has proven to be a huge moneymaker yet.

NEW YORK--Former Six Apart executive and well-read blogger Anil Dash has a new gig: he announced at the Web 2.0 Expo here on Wednesday that he will be the director of Expert Labs, a new nonprofit that will take the dot-com incubator model and apply it to new digital tools for the federal government.

"Despite what our ego tends to think in the tech industry, the issue is not that we need to have more tweeting from the White House," Dash said onstage. "(We can) help them learn the lessons that we've seen over the past half decade of Web 2.0's ascendence."

Expert Labs, which is a division of the American Association for the Advancement of Science that's funded by the MacArthur Foundation, will match digital voids and holes in government and policy with the developers who can fill them, with grant money paying for the work. The organization also hopes to host developer competitions, a similar move to some municipal projects like New York's "Big Apps."

It's not a government agency, but the Expert Labs Web site explains that "we've been privileged enough to connect with agencies and departments across the federal government, from the White House on down." Cutting through bureaucracy, needless to say, will still be a challenge. Dash is unfazed.

"If we tap into the expertise of each community, there's enormous potential," he said. "So we're going to ask policymakers for their expertise in defining the questions that we need answered." Then, Expert Labs plans to hook those projects up with technologists who can build the requisite systems, and then to members of the science and academic communities to help solve the issues at hand.

"No matter how smart the policymakers are in our government...there's always going to be more experts outside the Beltway," Dash said. "The tactics thus far have been a closed-door meeting with a half dozen people for an hour."

He asserted, "The Web has changed the way that works."

NEW YORK--You had two options if you wanted to hang out with Digg founder Kevin Rose at the Web 2.0 Expo conference this week: head over to the lobby bar of the trendy Standard Hotel on Monday night, where Digg was picking up the tab for several dozen of the city's blogger elite; or pack into Manhattan Center Studios on Tuesday night along with about a thousand other young, predominantly male New Yorkers for a live taping of Rose and co-host Alex Albrecht's "Diggnation" video show.

Geek heroes: Jay Adelson (left) and Kevin Rose in a screenshot from one of their regular 'Digg Dialogg' videocasts with Digg users.

Those are, after all, the two Diggs. There's Digg the company, the name that first put "social news" into the mouths of New York media both old and new, the BusinessWeek cover story that established the shaggy-haired Rose as digital media's poster boy, the start-up that was once talked about as a huge acquisition target for the likes of Current Media, News Corp., and even Google amid CEO Jay Adelson's coy insistence that it wasn't for sale. But then there's Digg the brand: haven for the wackiest of the Web, with a front page dominated by anything Apple, oddball science, insidery tech and politics news, and the latest YouTube sensations. It's a dual identity that seems to be tough for the industry, or the five-year-old company itself, to reconcile.

At the Web 2.0 Expo, both Diggs--and the tension between them--was on full display in a dual keynote by Adelson and Rose on Tuesday afternoon. And the executives were both vocal about the fact that Digg has got to change.

"We're about 40 million users today, (with) about 20,000 submissions a day going into the Digg system," Adelson said onstage. "It's certainly achieved huge things for us. It's what we've set out to do, but we have a ways to go."

Rose added, "We've pretty much stayed the same over the last couple years."

There's a revamped Digg coming, a complete overhaul using the Cassandra database management system, which was developed and then released as open source by Facebook. In the new version will be "instant Digging" that doesn't require registration or a login, better filtration of topics to fit any number of niche interests, and a "smarter" way to gauge story popularity so that both the number of "diggs" and the number of times a link was submitted in the first place are taken into account.

Adelson told CNET later on Tuesday, just outside the auditorium where hundreds of rowdy young Diggers were awaiting Rose and Albrecht to walk onstage for the live Diggnation taping (a co-production of Revision3, the video outlet that Rose and Adelson also co-founded), that this will arrive in the first half of next year. "I can't say with certainty when, because there are so many infrastructure components that have to come first," he said.

This talk of change and versatility is exactly the message that the San Francisco-based Adelson and Rose want to convey while they're visiting New York, the center of the global publishing industry. This is Digg the media company on parade, the Digg that picked up the tab for the cocktail-swilling media insiders at the Standard on Monday night; and this is the Digg that's taken a bit of a beating recently. True, its traffic isn't plummeting, and by most measures continues to grow at a decent pace, but as a news-sharing destination it's been eclipsed by both Facebook and Twitter.

Digg's once-gossiped-about valuation may have taken a hit simply because the market for social news has grown so saturated, and as a result the company is no longer a novelty. Take third-party Twitter app TweetMeme, for example, which takes the links shared all over Twitter in "retweets," and compiles them into something that looks an awful lot like Digg. Or the likes of Yahoo Buzz, which haven't proven to be as popular or ubiquitous as Digg but which proved that it's not particularly difficult to build your own social news service.

"It makes me very proud," Jay Adelson said of the Digg influence evident in TweetMeme buttons and, now, Facebook sharing buttons. He added, "I think that the sophisticated publisher understands the difference between sharing within a social network, sharing on Twitter, and sharing on Digg."

Influential, sure. But when it comes to making a lasting footprint in the media world, Digg hasn't yet been able to get past the common wisdom that the footprint in question will be from a beer-soaked Converse All-Star. And that's the Digg that was showcased on Tuesday night as Rose and Albrecht, both in trendy fitted plaid shirts, received a rock-star welcome for Diggnation.

More than a thousand people had showed up at the Manhattan Center Studios venue, a smaller crowd than the show's last taping in New York, but a company rep pointed out that the previous taping had been in the summer, and this one was on a school night. Someone in the audience excitedly waved a sign that said "WINDOWS 7 FTW!" (That's "for the win," in case you stepped in late.) Another sign read "I SKIPPED CLASS FOR THIS!" and still another, which Rose and Albrecht seemed especially proud of, was a green sign that read "GO HIPPIE!" with a massive, hand-drawn marijuana leaf.

Adelson says that the company's merry band of fanboys--yes, most of them are male--doesn't get in the way, strategy- or image-wise.

"Our core Digg enthusiasts frankly provide a tremendous amount of our feature ideas and feedback, and are the ones that we can count on to be there even when we screw up," Adelson told CNET on Tuesday night. "I don't think they hold us back. I think that's the power of the product."

Kevin Rose's essential Diggnation props: Mac laptop, open bottle of beer

(Credit: Revision3)

There have been some good signs. Adelson says that Digg's experimental advertising system, in which unpopular ads are penalized with higher costs ("We charge the advertisers more money when their ads start sucking," Rose explained in the Web 2.0 Expo keynote) have been a runaway success. The company also absorbed a Rose side project, Twitter directory WeFollow, which could have interesting implications.

Their mission is still precarious. The hordes of Digg loyalists propelled the company to fame, but they're known to be volatile: if they hate something, they'll make it obvious. In 2007, when Digg pulled down a number of news links in response to a cease-and-desist complaint (the links directed to instructions for cracking a digital rights management code in the now-defunct HD DVD format), avid users flooded its system with even more links to the code. Digg admitted defeat, and restored the censored links. Earlier this year, when a new URL-shortening feature called the DiggBar garnered a negative reaction, the company made some significant modifications. If they don't like the yet-to-be-unveiled Digg revamp, it could get really ugly.

But perhaps the most difficult part of Digg's dual-identity wrangling is the fact that the company's executives and figureheads really do seem to have an affinity for its mischievous roots. Take Tuesday night, when a few excited audience members at the Diggnation taping started waving around the pink tickets they'd received from local cops for downing booze while waiting in line outside to see the show.

"Open container in line? That is awesome!" Rose exclaimed, reaching for one of the tickets and displaying it in front of the crowd.

Co-host Alex Albrecht chimed in. "You should get that framed!"

Chase announced Monday a partnership with Facebook to power the finance company's inaugural "Community Giving" campaign, which will allocate a total of $5 million to small, local nonprofits voted on by Facebook members.

The campaign takes the form of--you guessed it--a Facebook Platform application, in which members can choose their favorite of more than 500,000 nonprofits. Naturally, then, they're encouraged to use the hallowed "social graph" to encourage their friends to do so as well.

The winner gets $1 million in a grand-prize announcement slated for February 1; five runners-up get $100,000 apiece, and then the entire top 100 receives $25,000 apiece. There's an advisory board consisting of celebrities and Chase execs, as well as Facebook vice president of communications Elliot Schrage.

The publicity effort for Community Giving, which reached out to celebrity Twitter users in both the entertainment and nonprofit space in addition to the mainstream press to spread the word, says it's been an early success: over 12,000 Facebook members signed on in the first day.

That's not quite as many as the hundreds of thousands who rallied to support a prospective Stephen Colbert presidential campaign in the matter of a week, or the tens of thousands who opted to follow actor Neil Patrick Harris in his first 24 hours on Twitter, but for something that's a legitimate charity effort rather than a goofy viral meme, it's respectable.

Facebook has traditionally been hands-off about partnerships on its application platform, but nonprofit and public interest-related projects have been the exception: the social network forged several media-outlet deals during the 2008 presidential election, partnered with nonprofits to create virtual gifts for its "Facebook for Good" campaign, and synced up with the Huffington Post for a "social news" experiment.

It was less than two years ago that Facebook founder Mark Zuckerberg said that corporate philanthropy wasn't an immediate goal for the social network because, at the time, it simply didn't have the profits.

NEW YORK--Web pioneer and conference honcho Tim O'Reilly warned the audience at the Web 2.0 Expo here on Tuesday afternoon that he thinks "we're headed into another ugly time." Namely, everybody is just being really nasty to each other. And it makes his hippie soul hurt.

For example, Rupert "Dr. Evil" Murdoch keeps threatening to pull News Corp.'s pay wall-guarded content from Google, perhaps offering an exclusive deal to another search engine for one hundred billion dollars (give or take a few bucks).

Those ubiquitous URL-shortening toolbars are throwing Web addresses behind a cloak of invisibility, O'Reilly said, and they "don't let you navigate freely like the Web used to work." With Google's Chrome hurling itself into the mix, the browser and operating-system wars are starting to look less "Mean Girls" and more "Aliens vs. Predator."

But O'Reilly's attitude isn't "bring it on, and get me a large popcorn with extra butter, while you're at it." Rather, he hinted that at least in some cases, he's willing to embrace Google as a big, cuddly, benevolent dictator in the midst of it all. It's "a monopoly that's a service of value to users," he said, adding that generally, when Google makes a product with the primary goal of one-upping the competition--Knol vs. Wikipedia, Checkout vs. PayPal--it's not a success.

That's probably because, at least right now, among all the giant robots stomping about the series of tubes, Google is the one that most resembles O'Reilly's vision of the "open Web." In a blog post prior to his speech, he predicted that Microsoft could take over this role. Or not. Either way, he insisted that "it's time for developers to take a stand."

Setting off this kind of electric shock in the Web's punditocracy is a great way to drum up attention and newsworthiness that doesn't have anything to do with philosophizing about the recession, extolling the possibilities of the real-time streaming Web, or predicting which dot-com figurehead is going to be the most plastered at South by Southwest this year. Thank goodness! That stuff was getting so boring!

And O'Reilly's rallying cry has already gathered reactions. Barbarian Group executive Rick Webb, for one, posted a colorful retaliatory blog post, in which he said that "setting aside the 'boo hoo, the Internet is becoming a bunch of walled gardens' arguments, when rational people have conversations about how to make the Web actually usable and not 95 percent piracy, spam, and fraud, almost every discussion starts with the proposition that there is no other realistic option but to chuck the whole thing and start over."

Of course, the Web should be in a state of "war." When have things been any different? It's a hub of innovation, competition, and constant change, and I think we all knew that already. The barrier to entry is low enough so that if there's a glaring problem with something, users will flock to whoever can create a better alternative. In fact, O'Reilly brought that up on Tuesday, when he talked about expensive in-car GPS navigation systems.

"The turn-by-turn directions from TeleAtlas cost $99 [on the iPhone], but Google is giving it away for free. This is a natural kind of extension for Google. I don't think Google is being evil here by being disruptive," O'Reilly said. "That's a massive user win, even though it is incredibly damaging to some existing companies and some existing business models. When Google offers free speech recognition, [that would be] an amazing win."

Is that legitimate innovation? Yes. But let's hope the "win" doesn't stop there. If Google manages to throw a sucker punch to Apple, Microsoft, or whoever else by offering something once-pricey for free, I should hope that the rest of the industry makes sure that it doesn't grow too complacent.

So let's get this straight: monopolies are bad, unless they're "nice" ones on behalf of companies that extol the virtues of Razor scooters, wheatgrass smoothies, and lava lamps. Competition is great, as long as everybody's nice to each other.

Doesn't quite make sense to me. But, hey, it's his show.